Treasure Global Inc (TGL) 2024 Q2 法說會逐字稿

Good day, everyone, and welcome to Treasure Global, Inc.'s second-quarter of fiscal year 2024 conference call.

(Operator Instructions) This conference call is being recorded.

A replay of today's call will be available on the Investor Relations section of TGL's website and will remain posted there for the next 30 days.

I will now hand the call over to Erika Kay, Vice President, Investor Relations at KCSA, for instructions and the reading of the Safe Harbor statement.

Please go ahead.

Thank you, operator.

Good morning, everyone, and welcome to Treasure Global's second-quarter fiscal 2024 results conference call.

With us on today's call, are Sam Teo, Chief Executive Officer; Michael Chan, Chief Financial Officer; and Jeremy Roberts, Independent Director.

Before we begin, I would like to remind you that today's call contains certain forward-looking statements from Treasure Global's management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended concerning future events.

Words such as may, should, project, expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements.

These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company's Form 10-K for the year ended June 30, 2023, and subsequent filings filed with the SEC.

Copies of this document are available on SEC's website at www.sec.gov. Actual results may differ materially from those expressed or implied by such forward-looking statements.

The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law.

Now it's my pleasure to introduce Sam Teo, CEO of TGL.

Sam, please go ahead.

Thanks, Erika, and thank you, everyone, for joining us today on our second quarter of fiscal 2024 earnings conference call for the period ended December 31, 2023.

I'm pleased to be with you today to update you on the progress that we are making to our Treasure Global business strategy and to provide you with our results for the quarter.

Before I review some of the exciting innovation that we announced during the quarter, I want to update you on some steps that we took that we believe will help Treasure Global to achieve our growth and enhance shareholder value.

This action, which is centered on our ability to leverage new cutting-edge artificial intelligence capability, further our strategy to be a leading innovator in our region, create new opportunity for profitable growth.

We believe this action has made us a stronger company and will lead to a new stage of growth for Treasure Global.

Supporting our operation growth in the second quarter, we announced a public offering raising USD4 million less fee and expenses.

We used a portion of the funds to retire the remaining USD2.1 million of convertible notes.

These actions helped us to fortify our financial position and to optimize our capital structure, free our funds so that we can continue to develop new innovative products and services for customer.

I shift our focus to higher margin businesses.

Much of Treasure Global success is built on our ability to innovate.

Throughout the quarter, we announced several initiatives that utilize artificial intelligence, or AI, to enhance our product offering and to engage more meaningful with our customer.

Through our use of AI, we have been able to anticipate a shift in consumer demand, which has lead to increases in market share for our businesses.

This effort has allowed us to identify new business opportunity and allow us to focus our growth on our higher margin products.

On our last call, we announced that we have developed an AI robot through the acquisition of AI technology of Tencent, and that we believe this will transform the e-commerce landscape on TikTok by offering dynamic interactive shopping experience for customers across the region.

This innovative approach to product marketing has been successful as these catch the attention of the TikTok community and create a unique shopping experience for viewers by providing a platform that can answer customer query, provide product details, and offer personalized recommendation.

This new way of shopping was expected to not only drive increased revenue for ZCITY, our e-commerce subsidiary, but is setting new standards in the live commerce industry.

Later in the quarter, we made history by host a first event, as ZCITY became the first business in Malaysia to conduct a live commerce section on TikTok.

This well-attended event that was co-hosted by human and an AI Robot surpassed Internet [expedition] with over 6,400 viewer participating in the section.

Because of the potential of this innovative technology in reshaping the way consumers interact with brand, we demonstrated our ability to enhance consumers' shopping experience, leading to more consumer engagement and approximately 1,100 purchaser.

The event was a significant leap forward for digital shopping experience.

Because of its popularity, TikTok live commerce provides a significant opportunity for Treasure Global to diversify our revenue stream and showcase product on ZCITY in a more innovative and engaging manner.

TikTok's status as the world's highest traffic live commerce platform makes it the ideal stage for ZCITY to unveil our groundbreaking technology and to showcase ZCITY product and services.

Throughout the quarter, we continue to look for a new way to reach consumer and to push the traditional boundary of e-commerce.

Following the success of our first live commerce event, we hosted another event on Meta platform with an AI robot equipped with advanced line question capability to engage with thousands of people in multiple languages, breaking down language barrier and enhancing accessibility.

This successful event set into lucrative market that are reshaping the future of e-commerce.

With Malaysia e-commerce market projected to reach USD20.9 billion by 2029, Treasury Global is strategically positioned to play a low in this anticipated exponential growth.

In the second quarter, we unveiled a new ZCITY Premium Store, offering an enriched user experience with diverse package, including top brand for our strategy partner, creating a robust and diversified offering for user, powered by our cutting-edge technology.

The ZCITY Premium Store offer innovative feature such as personalized recommendation, AI-driven discount, and real-time transaction tracking, providing user with an unparalleled and seamless shopping experience.

The Premium Store [enables drive] transaction as well as increased gross profit for Treasure Global.

We also announced the launch of 10 mini game in ZCITY's 3D World powered by Treasure Global AI Game Creator.

We incorporate the AI-powered game creator within the ZCITY 3D World so that user can customize and play the 10 game -- integrated mini games.

This strategy move not only enhance the gaming experience for user, but also positions ZCITY to assess the rapidly growing USD212 billion global gaming market by offering in-game purchase and virtual goods.

Our entrance into gaming aligned with our commitment to diversifying our revenue stream.

I'm proud to say that our reputation for innovation has been recognized.

During the quarter, Treasure Global ZCITY received a silver trophy for best e-commerce solution and MARKETING-INTERACTIVE Asia eCommerce Awards 2023.

The award recognized our commitment to excellence in the dynamic landscape of digital commerce.

Finally, we recently announced that we have entered into strategic alliance with AIO Synergy, a pioneering IT services developer company.

Through this collaboration, we are focused on reshaping the landscape of AI by working toward the development of next-generation AI solution and developing an exclusive state-of-the-art data center creator, specifically for AI application, which will serve as a hub for cutting-edge AI data analytics and the creation of AI-generated human experience.

The initial focus of this partnership is on the Malaysian market where both Treasure Global and AIO Synergy are committed to providing transformative AI solution to businesses across our various industry.

We expect to capitalize on the Southeast Asian AI market projected growth and leverage the region burgeoning interest and investment in AI.

This collaboration not only a milestone for the two company, but it is also a significant step towards fostering innovation and technology to accelerate in the Southeast Asian region at an opportune plan.

Throughout the first half of our fiscal year 2024, we have demonstrated our commitment to developing innovative products and advancing new market opportunity through strategic partnership.

We continue to make progress on our key priority, growing our addressable market and developing innovative new revenue generation opportunity.

We have clearly established ourselves as leader in AI e-commerce and continue to release innovative services offerings, which are increasing user engagement.

I believe this opportunity has positioned Treasure Global to deliver continued growth and innovation and allow us to pursue higher margin activity.

In closing, I'm pleased with the progress that we have met on our business strategy, and I am excited about the opportunity ahead for Treasure Global.

We continue to prove ourselves as a leading innovator in the region, positioning us to continue add new customer and attract more partner and investor.

I believe we are well positioned for the future, and we will continue to innovate and generate more profitable growth.

I will now pass the call over to Michael to discuss our financial results in greater detail.

Thank you, Sam, and good morning, everyone.

Today, I will review our financial results for the second quarter of fiscal year 2024, ended December 31, 2023, compared to the same period in 2022.

For the second quarter, total revenue was $6.7 million compared to $20.4 million for the same period last year.

Revenue were down year over year as we continued to shift our focus to growing our higher-margin business channel, including TAZTE as far as new higher-margin offerings for ZCITY.

As we discussed last quarter, TAZTE offering offer higher margin plus increased user engagement and stickiness by providing merchants with a product that they come to rely on for their business needs.

As Sam mentioned, we are also focused on growing our ZCITY product through our utilization of AI lead to increase revenue at higher margins.

We believe these actions will translate into increased revenue and higher margin for the company in the long term.

Gross profit for the second quarter of fiscal 2024 was approximately $346,000, up from $234,000 compared to the same period last year, demonstrating that the initiative to grow gross profit that we implemented have already started to work.

Our net loss of approximately $1.2 million for the second quarter of fiscal year 2024 compared to approximately $2 million in the second quarter of fiscal year 2023.

As of December 31, 2023, our cash balance was approximately $1.2 million compared to a cash balance of approximately $4.7 million as of December 31, 2022.

As Sam mentioned, ZCITY had over 2.68 million registered users and over 2,027 registered merchants as of December 31, 2023.

Quarterly active user for the quarter ending December 31, 2023, were 156,979, while paid user were down by 64%.

A total of 0.58 million transaction were transacted by our registered user over the current quarter.

As we have mentioned, we remain laser-focused on increasing gross profit and margins.

The measures we have introduced so far are already working and we expect further improvement going forward as we continue to expand TAZTE and add higher-margin solutions for ZCITY.

Now I will turn the call back to Sam to highlight our growth strategy.

Thanks, Michael.

I'm excited about the opportunity ahead for Treasure Global.

We have made significant progress on our business strategy and remain a leading innovator in the region.

The success of our growth initiative has allowed us to add new customer and attract new partner and investor who support our business.

We raised fund and retire our convertible notes, putting us on strong footing for the future.

I believe we are well positioned for the future and remain focused on achieving profitable growth.

As part of this focus, over the last five months, you have seen us intentionally move away from our lower-margin solutions like our e-Voucher products.

While this naturally lead us to a decrease in growth of the registered user and active user, this move strategically allow us to reserve more working capital so that we can invest in developing our TAZTE, [smartphone, and beverage] system, our one-stop solution for food and beverage outlets, and in our ZCITY solutions that utilize AI, allowing us to leverage this technology to capture higher margins.

As we move to fiscal 2024, you will see us continue to innovate and develop new products and services, with a focus on solution that will generate more profitable growth.

Thank you again to everyone for joining us on today's call and for your continued support.

This concludes our prepared remarks.

I will now ask the operator to close the line.

Thank you and have a great day.

Thank you for joining today.

I will now close the line.